In the arbitration case between Benihana and BOT, what was the amount of attorneys' fees awarded to Benihana?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
agreement, and that a February 5, 2014, notice of termination served on BOT was reasonable. An evidentiary hearing was held before a three-member arbitral panel on June 2-6, 2015, in New York City, and the parties submitted post hearing briefs. The arbitration panel issued a split decision. Although the majority declined to terminate the Hawaii License Agreement, the entire panel found that BI was the "prevailing party," awarded BI more than $1.1 million in attorneys' fees, and ordered that a Southern District of New York preliminary injunction should be permanent. BOT paid the attorneys' fees and did not challenge the permanent injunction. BI challenged the denial of termination in the Southern District of New York, as discussed below.
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- Benihana, Inc. v. Benihana of Tokyo, LLC, Case No. 15-cv-07428-PAE (United States District Court, Southern District of New York).
Source: Item 3 — LITIGATION (FDD pages 14–16)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, there were multiple instances of attorney's fees awarded to Benihana in cases against Benihana of Tokyo, LLC (BOT). In one arbitration case, the arbitration panel found that Benihana was the "prevailing party" and awarded Benihana more than $1.1 million in attorneys' fees. BOT paid these fees and did not challenge a permanent injunction that was also issued.
In a separate legal action, after a motion by Benihana to hold BOT in civil contempt for violations of the permanent injunction, the court granted Benihana's motion. As a result, the court imposed sanctions against BOT, which included awarding Benihana $634,680 in attorney's fees and costs.
These awards of attorney's fees highlight the potential legal costs and risks associated with franchise disputes. For a prospective Benihana franchisee, this underscores the importance of adhering to the franchise agreement and all related legal and operational requirements to avoid similar disputes and potential financial penalties. It also demonstrates Benihana's willingness to pursue legal action to protect its brand standards and agreements.